Commercial Symbiosis

Heinrich Anton de Bary, the influential German botanist, surgeon and microbiologist is often considered to be the founding father of modern mycology. Devoting his life to the study of plant diseases and fungi, one of de Bary’s greatest achievements was to define the phenomenon of Symbiosis, ending a century long debate over how to categorise mutual relationships between species. Derived from the Greek “living together”, the German polymath adapted the term, scientifically speaking, to mean “the living together of unlike organisms”, a partnership that can benefit one, both or even neither party.

Although de Bary’s research was ground-breaking in the field of science, his work can be equally as pertinent to that of business. Using the great German’s methodology, the optimum form of affiliation between two companies would be “Reciprocal Altruism”, a type of bond that should prove advantageous for both parties. One of the most well established forms of such a relationship can be found on the high street, residing within the UK’s department stores. The premise is simple and one that should benefit all; companies showcase their wares in the shop, making the department store more attractive to consumers with its wide array of popular brands, whilst the brands themselves benefit because they know the shop will attract a heightened level of footfall.

Much like two species working in harmony, so too House of Fraser and Mulberry have formed a symbiosis, aiming to benefit from one and other’s brand appeal. However, in nature, as in business, if one half starts to falter, the other will invariably suffer. With the troubled department store having to stave off administration by closing 31 of its 59 stores, the effect has been felt far and wide. Mulberry has become the first concession partner to acknowledge the cost of the relationship, admitting it will be forced to take a £3m one-off hit to its bottom line. With its half-year profits ‘materially reduced’ as a result of flagging UK sales, particularly in House of Fraser, Mulberry will have to reassess the viability of the 21 concessions it has in-store, employing 88 people. On the news, Mulberry’s share price collapsed 30% as it was left nursing potentially hefty losses.

With Mike Ashley stepping into the breach, purchasing House of Fraser and pledging to reverse its store closure plans, the future is looking brighter for the duo, although it is unclear what terms he will offer to concession partners. Using de Bary’s theory once more, the dynamic could now be considered more of an “Amensalist Symbiosis”, one that proves uneven and potentially damaging to one of the parties. At the time of House of Fraser’s collapse, Mulberry was owed nearly £2.4m, with little chance of ever getting its money back.

Documents published by House of Fraser’s administrators show that the more up-market brands that enjoy concessions within House of Fraser, such as Prada, Gucci and Armani, will be left most out of pocket, purely due to the value of their unsold products. Fashion brand Jigsaw has also cut ties, terminating 20 concessions, with Karen Millen, also owed close to £1m, believed to be removing stock.

Some commentators have speculated that Ashley will transform House of Fraser into a “Selfridges of sport”, one of the entrepreneurs known ambitions. At first glance, the House of Fraser deal may be “the living together of two unlike organisms”, merging a sports shop known for its big mugs with a store selling high fashion. However, it may tally with the strategy of competing for more affluent consumers, especially as discount fashion has become more saturated.

With such a risky move, Ashley will be hoping that Sports Direct and House of Fraser don’t form a bond that, in time, will destroy both brands’ identities, a “Competition Symbiosis” as de Bary might say. It seems that from genes to jeans, the relationships formed in both nature and business are closer than one might think.

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